Questions to Ask a Retirement Advisor
These are the questions to ask about retirement when you sit down with a retirement planner or advisor, whether it is a first meeting or a review with the one you already use. They run in six groups, in the order the conversation usually goes: the advisor, your number, income, taxes, health and family, and working together. Several use United States terms such as Roth conversions and Medicare, so elsewhere ask about the local equivalent.
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The questions
Each question, and why to ask it
The advisor
Are you a fiduciary at all times, and will you put that in writing?
Why ask it
An answer such as "in most cases" usually means the planning advice is held to one standard and the products sold beside it to another. A written yes is short and easy to produce. The word and the duty behind it differ by country, so ask which standard covers them where you live.
How exactly are you paid: a fee, commission, or both?
Why ask it
Ask for the percentage and the dollar figure on a balance your size. Advisors paid by product commission can be competent, but you should know which recommendations pay them and which do not.
What will this cost me in total in year one, including fund charges?
Why ask it
The advice fee is one layer of several. Fund expense ratios, platform charges and trading costs sit on top of it, so have them added into one yearly figure for a portfolio like yours.
How many of your clients are already retired and living off their savings?
Why ask it
Building a balance and paying an income out of one are different jobs. A retirement planner who mostly looks after people still at work may have had little practice at the second, so ask how many clients they have taken through the first years of withdrawals.
What credentials do you hold, and where can I check your record?
Why ask it
Many regulators publish registration and disciplinary history, and the advisor should be able to name the register for you to search. Titles such as retirement planner or retirement specialist are often open to anyone, so ask which body awarded each designation and what it took to earn.
How many households do you look after, and will I deal with you or with someone on your team?
Why ask it
The number tells you how much attention is left for you in a year when every client is calling. If an associate or a service team handles the routine work, meet that person before you sign.
Do you or your firm receive anything from a third party for what you recommend?
Why ask it
Commissions, revenue sharing, referral payments and sales targets all shape recommendations, and none of them are visible on a statement. Ask as well whether the firm runs funds of its own and how much client money ends up in them.
If all I want is a written plan, what would that cost on its own?
Why ask it
Some advisors will do project or hourly work, which can be the better value if your investments are simple and your questions are one-off. An unwillingness to price anything except ongoing asset management tells you what the business is built on.
Can I see a sample retirement plan you have written, with the names removed?
Why ask it
A real one shows a spending figure, the income sources year by year and the assumptions underneath. If the sample is mostly fund charts with a cover page, the service on offer is investment management with a retirement label.
Where will my money be held, and who has custody of it?
Why ask it
The usual safeguard is an independent custodian that holds the assets in your name and sends statements straight to you. Treat any request to pay money to the advisor personally as a reason to stop, and ask what protection applies in your country if the custodian itself fails.
Your number
Given what I have saved and what I spend, when could I stop working?
Why ask it
The answer should come with a date and the assumptions attached to it. If you get a year without being told what return, inflation and spending figures produced it, you have been given an opinion rather than a projection.
How much do I need saved before I can retire, and what return does that figure assume?
Why ask it
The target is only as firm as the investment return behind it. Ask for the assumed yearly return after fees, and for the same target worked out with a return one point lower.
How much will I really spend in retirement, and how did you estimate it?
Why ask it
A common shortcut is a share of your salary, which says little about a household that saves heavily or still has a mortgage. Have the estimate built from your own statements, with the costs that end at retirement taken out and the ones that begin put in.
What inflation rate is built in, and what do these figures look like in today's money?
Why ask it
A projection in future dollars flatters every number on the page. Ask for both versions side by side, and whether health costs are assumed to rise faster than everything else.
What age does the plan run to, and what if I live past it?
Why ask it
An average lifespan is only an average, so a plan that ends there has no answer for the years after. Find out which age the projection stops at, why that one, and what income would still be arriving if the savings were gone.
What are the chances this plan runs short, and what does that look like when it happens?
Why ask it
Planning software often runs the same plan through many market paths and reports a success rate. The percentage matters less than the failures: ask how old you were when the money ran out in the poor runs, and which change would have prevented it.
What happens to the plan if returns are poor in my first five years of retirement?
Why ask it
For someone making withdrawals, the order in which returns arrive can matter more than the long-run average. A serious answer names a cash buffer, a spending cut or a bond ladder, and says when each one is used.
What would retiring two years earlier, or two years later, change?
Why ask it
Each extra year at work is one more year of saving and one less of spending, so the date moves the result more than most people expect. Three versions on one page turn a vague wish into a trade you can weigh.
Am I saving enough right now, and where should the next dollar go?
Why ask it
For someone still working, this is the answer with the most left to change. A full reply ranks the choices in your case, such as a workplace plan up to any employer match, a tax-free account or the mortgage, and gives the reason for the order.
How would part-time work or a phased retirement change the picture?
Why ask it
Even modest earnings in the early years can put off withdrawals and a pension claim. Ask to see the plan with a few years of part-time pay added, and check how that pay is treated by any benefit you would be drawing by then.
Will I still have debts when I retire, and should the mortgage be cleared first?
Why ask it
Paying off the loan and keeping the money invested are both defensible, and the choice turns on the interest rate, the tax on the withdrawal and what lets you sleep. Be alert to an advisor paid on assets who always lands on the answer that keeps the assets.
Income
Where will my monthly income come from once the paychecks stop?
Why ask it
A full answer is a list with amounts: so much from a pension, so much from benefits, so much drawn from savings each month. If all you hear is a withdrawal percentage, the plan has not yet been turned into a paycheck.
How much can I spend each year, and what would make you tell me to spend less?
Why ask it
You want the trigger and the review schedule, not just a percentage. Ask when they last told a client to cut back, and how that conversation went.
When should I claim my state pension or Social Security, and what did you compare?
Why ask it
When to claim is one of the larger decisions in the plan and is hard or impossible to reverse. Look for a break-even comparison and attention to a spouse's survivor benefit rather than a rule of thumb, and ask which claiming ages your own system allows.
I have a workplace pension. Should I take the monthly payment or the lump sum?
Why ask it
This choice usually cannot be undone, and an advisor paid on assets earns more if you take the lump sum and hand it over. Ask what income the lump sum would have to produce to match the pension, and which survivor options the monthly payment carries.
What should happen to the old workplace plans I left with former employers?
Why ask it
Rolling them into an account the advisor manages can be the right move, and it also raises the balance the advisor is paid on. Get the fees and fund choices in each old plan set beside those of the new account, and ask what protections or early-access rules you would give up by moving.
How is my money invested now, and how would that change as I get closer to retiring?
Why ask it
Get the current split between shares, bonds and cash as percentages, and the split intended for the year you retire. A promise to become "more conservative over time" gives you nothing to hold anyone to later.
How much cash or short-term reserve does the plan hold, and why that amount?
Why ask it
The reserve is what keeps you from selling investments at a loss to buy groceries. A specific number with a reason behind it suggests a plan; a vague answer usually means the question has not been settled.
If I need a large unplanned sum, where does it come from?
Why ask it
A new roof, helping an adult child, or a car all land at inconvenient moments. The answer should name a source and describe the effect on the projection rather than treating it as a rounding error.
What is your view on annuities, and would you earn a commission on one you recommend?
Why ask it
Some annuities solve a real problem by guaranteeing income for life; others are costly and hard to exit. Asking about the commission and the surrender period together gets you the fuller answer.
Should my home be part of the plan, through downsizing or borrowing against it?
Why ask it
The house is often a household's largest asset, and many projections leave it out. Ask what selling and buying somewhere smaller would add after costs, and treat any loan against the home as a product with its own fees, to be explained by someone who does not sell it.
Which of my income sources rise with prices, and which stay flat?
Why ask it
Some pensions are linked to inflation, and many annuities and fixed payments are not. Have the advisor mark each source one way or the other, then show what the flat ones would buy twenty years in.
Will you set up a regular payment to my bank account, and who decides what is sold to fund it?
Why ask it
After decades of paychecks, irregular withdrawals unsettle many retirees. Check whether the payment is automatic, whether tax comes out before it reaches you, and whether the sales behind it follow a schedule or somebody's judgment on the day.
Taxes
In what order will we draw from my accounts, and why that order?
Why ask it
The sequence across taxable, pre-tax and tax-free money can change the tax paid over a whole retirement. Have the order written down year by year, with the reason for each switch from one account to the next.
What will my tax bill look like in my first year of retirement compared with my last year of work?
Why ask it
People often expect the bill to fall and are surprised when pension income, withdrawals and benefits stack on top of one another. Ask for an estimate on paper, with the amount to withhold or set aside so the first return does not arrive with a penalty.
Should I be doing Roth conversions, and in which years?
Why ask it
Conversions are most often weighed in the lower-income years between retiring and required distributions, and they do not suit everyone. Ask what one would cost this year in tax and Medicare premiums, and what it is projected to save later.
How will required minimum distributions affect my taxes and my Medicare premiums?
Why ask it
Large pre-tax balances can push income high enough to raise both. Ask which year the projection shows that happening and what could be done in the years before it. These are United States rules, so elsewhere ask whether any withdrawals are compulsory and from what age.
How will my Social Security or state pension be taxed alongside my other income?
Why ask it
In the United States part of the benefit can become taxable as other income rises, and other countries have rules of their own. Ask where your thresholds sit this year and whether a different mix of withdrawals would keep you under one.
Would moving to another state or country change my taxes or my benefits?
Why ask it
Places differ on how they tax pensions, account withdrawals, property and estates, and some benefits do not travel. If a move is even a possibility, have it priced before you commit to conversions or a house sale that assume you are staying put.
Am I missing a tax-efficient way to give to my children or to charity?
Why ask it
What is allowed depends heavily on the country and the type of account, and some routes only open at a certain age. The advisor should be able to name the ones that might fit you, then send you to a tax professional to confirm the detail.
Will you work with my accountant, and which of you is responsible for the tax projections?
Why ask it
Conversions, the timing of capital gains and required withdrawals all sit between the two professions, and each can assume the other has them in hand. Settle who runs the numbers, who files, and whether the two speak before the tax year closes.
Health and family
If I retire before public health cover starts, how will I pay for coverage until then?
Why ask it
In the United States that means the years before Medicare, and the gap can be one of the larger costs of an early retirement. Ask for a figure per year rather than a reassurance that it is manageable.
What have you assumed for my health costs once I am on Medicare or the public system?
Why ask it
Public cover rarely means free: premiums, dental work, hearing aids, prescriptions and whatever the system leaves out still come from you. Ask for the yearly amount written into the plan and where that amount came from.
How are we planning for long-term care, and what amount is in the plan for it?
Why ask it
The options are usually insurance, assets set aside, family or public programs, and what those programs pay for differs by country and state. A plan with no care figure at all has left out what can be the largest expense of later life.
What is the plan for my spouse if I die first, and do they understand it?
Why ask it
Income often falls further than expenses do, and the surviving partner is frequently the one who never attended the meetings. A plan only one of you can explain is not finished.
My partner and I are different ages and may retire at different times. How does the plan handle that?
Why ask it
A gap of several years changes health coverage, claiming ages and how long the money has to last. Check that the projection runs through the younger partner's later years, and that it shows the stretch when one salary has stopped and the other has not.
If I want to help my children or grandchildren with money, how much can the plan stand?
Why ask it
Generosity early in retirement is paid for late in it. Have the gift entered into the projection first, so the amount comes from the numbers and not from guilt or guesswork.
Does the plan change if I want to leave money behind, or if I would rather spend it all?
Why ask it
What you intend to leave shapes withdrawal order, account titling and beneficiary choices. Spending it all is a legitimate goal, and the plan should be rebuilt around it rather than argued out of you.
Are the beneficiaries on my accounts and policies up to date, and who checks?
Why ask it
In many places the person named on a retirement account or policy takes priority over a will, so an old form can send money to a former spouse. Ask the advisor to list every account with its current beneficiary, and ask a lawyer how the rule works where you live.
Who makes decisions about my money if I can no longer manage it myself?
Why ask it
That takes a legal document such as a power of attorney, drawn up while you are well, and the advisor should know who holds it. Ask too whether they keep a trusted contact on file and what they would do if your instructions began to look out of character.
Working together
What in my current setup would you change first, and what would you leave alone?
Why ask it
A wish to move everything on day one deserves a second question, especially where selling would trigger tax or exit charges. Sound holdings left in place are a sign of judgment rather than of sales pressure.
How often will we meet, and what will you send me between meetings?
Why ask it
Agree the number of meetings a year and whether a call in between costs extra. In writing, look for a yearly summary of the plan on top of the custodian's statements, and a named person to call with a quick question.
When markets fall hard, what will you do, and what will you ask me not to do?
Why ask it
A retirement plan gets its real test in the year you want to sell everything. Ask what they did for retired clients in the last sharp fall, and have the agreed response written into the plan while you are calm.
What do you look at in a yearly review, and what would make you change the plan?
Why ask it
A review that only reports investment performance is a portfolio update. A retirement review sets a year of real spending against the plan, looks ahead to next year's tax, and tests whether the withdrawal amount still holds.
What do you need from me each year to keep the plan accurate?
Why ask it
The projection is only as good as the spending and life changes you report. Agree what you will send and when: a year of spending, the latest tax return, and news of any change in health, work or family.
What is the weakest part of my plan as it stands today?
Why ask it
Every plan has one: a spending figure that is really a guess, a single large holding, no provision for care, a partner who has never been in the room. An advisor who can name yours without being pushed has been reading your file, not a template.
What happens to my plan if you retire, sell the practice, or die?
Why ask it
An advisor close to your own age may want to stop working at about the time you most need one. A named successor and a written continuity plan matter more the closer your advisor is to leaving.
How would I end this arrangement, what would it cost, and what could I keep?
Why ask it
Surrender charges, proprietary funds, and transfer fees can make leaving expensive. Ask before you sign, while the answer can still affect your decision.
Working with a Retirement Advisor
Practical guidance for the conversation itself
Before the first meeting
Bring documents rather than estimates
Recent statements for every account, pension and benefit projections, the mortgage balance, insurance policies and your latest tax return. With the real figures on the table, the first meeting can test a plan instead of collecting paperwork.
Work out what you really spend
Retirement plans stand or fall on this figure, and it is an easy one to misjudge from memory. A year of bank and card statements is more reliable than a budget drawn up for the occasion, and a plan built on guessed spending is a guess with formatting.
Check the public register first
Registration and disciplinary records are free to search in many countries: FINRA BrokerCheck and the SEC's adviser search in the United States, the FCA Register in the United Kingdom. Elsewhere, ask which regulator keeps one. Five minutes beforehand leaves the meeting free for the plan itself.
Decide what you want the money to do
Leaving work at a certain age, helping a child, staying in the house, leaving something behind. Advisors optimize toward whichever goal you give them, so give them the real one.
Choose the questions for this meeting
A first meeting with a retirement planner is mostly the opening group, The advisor, plus the first question under Your number to see how they think. Once you have hired someone, the planning meetings follow the middle four groups in order, and Working together is the group to bring back at each yearly review.
Costs to add up before you agree
- The advice fee, as a percentage and as a dollar amount on your actual balance
- Expense ratios of every recommended fund, which are charged on top of that fee
- Any commission or ongoing payment on insurance and annuity products
- Platform, custody, and trading charges
- Exit costs: surrender periods, transfer fees, and holdings that cannot be moved
Warning signs
- A product recommendation before anyone has looked at your spending or your tax position
- Reluctance to answer the fiduciary question with a plain yes and a signature
- Pressure to move everything at once, or a deadline attached to an offer
- Any request to make payments to the advisor rather than to a custodian
- Returns promised as a sure thing, or risk described as removed rather than reduced
Common mistakes
Hiring on rapport alone
Trust is necessary and not sufficient. Fee structure and custody arrangements determine what can go wrong regardless of how much you like the person across the table.
Judging by returns rather than by the plan
Withdrawal order, tax timing, claiming decisions and health costs are where a retirement plan is usually won or lost, and none of them shows up in a performance chart. Ask to see the plan before the returns.
Leaving one partner out of the meetings
The person who did not attend is often the one who has to manage alone later. Both of you should be able to explain the plan without help.
Treating the plan as finished
Tax rules, health, markets, and family circumstances all change. A plan not revisited every year or two quietly becomes a document about a different life.